On July 20, 2007, the Centers for Medicare & Medicaid Services issued new reimbursement rules that limit the use and dosage for a class of anemia drugs known as erythropoiesis stimulating agents (ESA’s), in large part prompted by findings that the medications were being over-prescribed for profit under the current billing rules.

However, right about now, reimbursement rates are probably the least of the worries for the companies that market the drugs, Johnson & Johnson and Amgen. On May 10, 2007, Amgen received a subpoena from the New York attorney general seeking documents related to “promotional activities, sales and marketing activities, medical education, clinical studies, pricing and contracting, license and distribution agreements and corporate communications,” according to the firm’s May 22, 2007, SEC filing.

Also, a J&J spokeswomen said her company has also received a subpoena that covers the sales, marketing, medical education, and clinical trials of the ESA’s, according to the May 25, 2007, Cancer Letter.

The drugs are sold under the brand names Procrit, Epogen, and Aranesp, and Amgen manufactures all three, but Procrit is marketed by J&J.

On April 17, 2007, Newsday reported that the large for-profit dialysis chains like DaVita and Fresenius are negotiating volume discounts that allow them to buy ESA’s at a lower price than the reimbursement rate from Medicare, “making the drug a profit center.”

A June 2007 report on an investigation by the US Department of Health and Human Services Office of Inspector General found dialysis facilities could acquire the anemia drugs for as much as 10% below Medicare reimbursement levels. Acquisition costs varied substantially, the report notes, with chain-owned freestanding clinics often paying less than non-chain freestanding and hospital-based facilities, but all totaled, 99% of freestanding dialysis facilities could purchase ESA’s for less than the Medicare reimbursement rate.

On May 9, 2007, the New York Times reported that J&J and Amgen were paying “hundreds of millions of dollars to doctors every year in return for giving their patients anemia medicines.”

Federal law bars drug makers from paying doctors who prescribe drugs in pill form to be purchased at a pharmacy, but companies are allowed to offer rebates to doctors who buy drugs that are administered in their office.

Documents obtained by the Times show that, at just one practice in the Pacific Northwest, six cancer doctors received $2.7 million from Amgen for prescribing $9 million worth of its drugs last year.

Michael Sullivan, who worked as a business manager for the six doctors in the Pacific Northwest for 9 years, told the Times that the rebates inevitably encourage use of the drugs and that as result of the rebates from Amgen, the six doctors made about $1.8 million in net profit on the drugs they prescribed.

On May 10, 2007, the Wall Street Journal reported a review of documents provided by Dean McClellan, a former sales representative who filed a whistleblower lawsuit against J&J alleging that the company “offered excessive financial incentives for doctors” to prescribe Procrit and encouraged doctors to prescribe the drug at higher doses than were approved.

One document, cited by Journal, estimated that a doctor who purchased nearly $1 million worth of Procrit over 15 months would receive $237,885. Another program offered a discount for J&J’s product line for hospitals that used Procrit at least 75% of the time. J&J also developed a “Right of First Refusal” contract that required doctors to allow J&J to make a better offer if Amgen lowered the price of Aranesp, making it cheaper than Procrit.

Half of Amgen’s total revenue for 2006 was earned by Epogen and Aranesp, bringing in combined sales of $6.6 billion. Procrit was J&J’s second best selling drug last year at $3.2 billion, according to Forbes on March 21, 2007.

In the US, the majority of the profits are tax dollars, because Medicare pays for over 90% of services provided to patients with end stage renal disease (ESRD), and the anemia drugs cost approximately $2 billion a year, according to a report by the US House Ways and Means Committee which oversees spending by the Medicare and Medicaid programs.

The drugs are approved only for the limited use with patients who are anemic and undergoing dialysis due to chronic kidney disease, cancer patients who are receiving chemotherapy and patients who are scheduled to have major surgery to reduce the need for blood transfusions.

According to the FDA-approved labeling, before receiving ESA’s, patients should have a hemoglobin (red blood cell count) level of 10-12 grams per deciliter of blood, and the drugs are to be used only if the level drops below 10 grams.

Despite the FDA label, a 2006 report by the US Renal Data System, a large federally-funded registry of patients on dialysis, found that more than 40% of dialysis patients have a hemoglobin level greater than 12, and over 20% have hemoglobin levels above 13.

In the past year, investigations have shown that the drugs are being administered to patients who are not receiving dialysis or chemotherapy and in higher doses than approved. In fact, one study found that about 50% of dialysis patients had hemoglobin levels above what the FDA considers safe, and about 20% develop dangerously high levels that can lead to heart attacks and strokes, according to the November 17, 2006, medical journal Lancet.

A November 2006 Dialysis and Transplantation study found that the population with a red blood cell count above the guidelines also had higher costs of $3,100 per patient per year more for just the anemia drug.

Dr Laura Pizzi, a Research Associate Professor of Health Policy at Jefferson Medical College in Philadelphia who led the study, testified at a December 2, 2006 hearing before the House Ways and Means Committee and discussed how the study converted the difference in utilization to dollars amounts between actual usage versus recommended practice based on 2005 Medicare reimbursement rates and estimated that Medicare could have reduced the cost for the drugs by 36% if dialysis facilities adhered to the guidelines.

“If CMS spends $2 billion per year,” she said, “it is reasonable to say that several hundred million dollars could have been saved on the drug if providers followed the guidelines.”

On December 6, 2006, Dr Ajay Singh, clinical chief of the Renal Division and director of dialysis services at the Brigham and Women’s Hospital, testified at a hearing before the US House Ways and Means Committee and told lawmakers that patients in the higher hemoglobin group had a 34% higher risk of death and cardiovascular complications compared to patients in the lower level group.

He testified to a study that found there were 52 deaths in the higher group versus 36 in the lower hemoglobin group, or a 48% higher risk and a 41% higher risk of hospitalizations for heart failure and more cardiovascular adverse events.

Dr Singh also said the study found no benefits for patients who received the drugs and, therefore, “the conclusion was there was both increased risk and no substantive incremental quality of life benefit in raising the hemoglobin among patients with chronic kidney disease not on dialysis.”

An editorial in the April 18, 2007, Journal of the American Medical Association, by Dr Daniel Coyne, a professor at Washington University School of Medicine, estimated that it costs the Medicare program $1,700 more for each patients on the higher dose. “Physicians need to challenge industries,” he wrote, “that appear to be using patients as profit centers based on bad science.”

In February 2007, the FDA notified health care professionals of the results from a large clinical trial evaluating the use of Aranesp to treat cancer patients not receiving chemotherapy in which patients received either Aranesp according to the approved dosing regimen or a placebo.

Patients treated with Aranesp, the FDA reported, had a higher death rate and no reduction in the need for transfusions compared to those treated with placebo. The FDA warned that the finding showed that treating anemic cancer patients not on chemotherapy with an ESA may offer no benefit and may cause serious harm.

In a March 9, 2007, safety alert, the FDA reported that an analyses of four new studies in patients with cancer found a higher rate of serious and life-threatening side effects and/or death with the use of ESA’s. The studies were evaluating an unapproved dosing regimen, a patient population for which ESA’s are not approved, or a new unapproved ESA.

According to the FDA, as of March 2007, there were five clinical trials that demonstrated decreased survival time in cancer patients receiving ESA’s compared with those receiving blood transfusions.

In addition, the agency reported a higher rate of blood clots, strokes, heart failure, heart attacks and death in patients with chronic kidney failure when ESA’s were given to raise hemoglobin levels higher than 12.

The FDA advisory also noted that a higher risk of blood clots was reported in patients who were scheduled for major surgery and received ESA’s.

The FDA also warned of an increased rate of tumor growth in patients with advanced head and neck cancer receiving radiation therapy and metastatic breast cancer patients receiving chemotherapy, when ESA’s were given to maintain levels of more than 12.

There was also a higher rate of death reported, the agency said, but no fewer blood transfusions when ESA’s were given to patients who were not receiving chemotherapy.

In March 2007, the FDA revised the product labeling for the drugs to include updated warnings, a new boxed warning and modifications to the dosing instructions. The boxed warning advises doctors to use the lowest ESA dose to gradually increase the hemoglobin level to a concentration sufficient to avoid the need for blood transfusions.

The label revisions, the FDA said, were based on recently completed trials that described an increased risk of death, blood clots, strokes and heart attacks in patients with chronic kidney failure when ESA’s were given at doses that resulted in higher than recommended hemoglobin levels.

The revisions also addressed the trial findings for cancer patients, both when ESA’s were given at doses intended to result in higher than recommended hemoglobin levels, and when ESA’s were given to cancer patients whose anemia was not chemotherapy-related.

The revised label also summarizes the information from the trial that showed an increased risk for deep venous thrombosis in patients following orthopedic surgery when ESA’s were administered without the blood clot prevention measures listed on the product label.

On May 8, 2007, the FDA released a report by agency scientists that said there was no evidence to support that ESA’s improved the quality of life in patients or extended their survival, while several studies show the drugs can shorten lives when used at high doses.

On June 26, 2007, Robert Vito, Regional Inspector General for Evaluation and Inspections in Philadelphia at the US Department of Health and Human Services’ Office of Inspector General, testified at a hearing before the House Ways and Means Committee and described cases where dialysis centers have been found to be submitting false claims for payment to Medicare involving the anemia drugs.

This year, he said, Dialysis Clinic, Inc., which provides services to Medicare beneficiaries with ESRD with clinics located in more than 30 States, agreed to pay $1.8 million to resolve liability under the False Claim Act, with the majority of the settlement associated with the administration and billing of ESA’s when it was medically unnecessary.

According to US Renal Data System and the Medicare Payment Advisory Commission, Medicare spends about $64,000 annually for each person on hemodialysis for all medical services, and the anemia drugs Procrit, Epogen and Aranesp are the single largest drug expense for Medicare.

In 2005, Medicare spent $2 billion on the drugs, and from 1991 to 2004, the cost of the medications to Medicare increased 716% from $245 million to $2 billion, according to a report by the US House Ways and Means Committee.

Amgen produced the synthetic epoetin in 1989 and sold it under the brand name Epogen as a treatment for anemic kidney patients and HIV related anemia. Shortly after Epogen came on the market, Amgen entered into an agreement to allow J&J to sell the same drug under the brand name Procrit, as long as it stayed out of the dialysis market, which basically helped the young company raise capital.

In 1993, J&J received approval to sell Procrit as a treatment for cancer patients with chemotherapy-related anemia, and a few years later, Amgen gained FDA approval for the long-lasting version of the drug, Aranesp, to treat both renal and chemotherapy related anemia.

Recent investigations have shown the drug makers are providing incentives to encourage the over-prescribing of ESA’s to Medicare patients by charging less for the drugs than the Medicare reimbursement rates.

A March 2006 government report entitled “Medicare Reimbursement for New End Stage Renal Disease Drugs,” found freestanding dialysis facilities on average were able to acquire Aranesp for between 14 and 27% below the Medicare reimbursement amounts in 2005.

On May 10, 2007, due to reports of rampant over-prescribing of the drugs for uses and doses not approved by the FDA and the deaths and injuries to patients as a result, the Oncology Drug Advisory Panel (ODAC) voted 15-2 in favor of adding new restrictions on the use of the drugs and voted 17-0 in favor of requiring the drug makers to conduct new clinical trials.

However, experts say the recommendations come about ten years and probably tens of thousands of deaths and injuries too late, because the FDA was made aware of the serious health risks associated with ESA’s in a report on the Amgen sponsored Normal Hematocrit Study back in 1996, and the FDA did little more than revise the product labeling a wee bit.

The 1996 study was designed to evaluate whether patients with chronic renal failure undergoing dialysis had fewer cardiovascular complications if the ESA was administered to attain a higher hematocrit level as compared to a lower level. The trial was terminated early because of a finding of more deaths and non-fatal myocardial infarctions in the patients randomized to the higher hematocrit target level.

The labeling revision recommended that the ESA’s not be used to achieve hematocrit in excess of 36%, or a hemoglobin level of 12 g/dL and was accompanied by the sponsor’s agreement to conduct a study to further examine the risk for blood clots among patients receiving ESA’s because an increased thrombotic risk was suspected to be one of the causes for the risks detected in the study, according to the FDA.

So ten years later, two clinical trials and an editorial finally appeared in the New England Journal of Medicine in November 2006, to report the risks associated with the use of ESA’s in the treatment of anemia from chronic renal failure.

The Correction of Hemoglobin and Outcomes in Renal Insufficiency (CHOIR) study showed increases in serious and potentially life-threatening cardiovascular events when Procrit was administered to reach higher hemoglobin levels, and the Cardiovascular Risk Reduction by Early Treatment with Epoetin Beta (CREATE) study trended toward more cardiovascular events in a pattern similar to the CHOIR study, thus strengthening the findings of the CHOIR study, the FDA said.

On June 26, 2007, Dr John Jenkins, Director of the FDA’s Office of New Drugs Center for Drug Evaluation and Research, testified at a hearing before the House Ways and Means Committee and said the study findings “underscore the importance of the warnings previously described in the labeling for Procrit, Epogen, and Aranesp regarding cardiovascular risks that include thrombotic events and increased mortality in hemodialysis patients who participated in the Normal Hematocrit Study.”

He told the Committee that the new studies, combined with the findings from the Normal Hematocrit Study, showed that patients with anemia due to chronic renal failure, whether or not receiving dialysis, “were at increased risk for serious cardiovascular complications when ESA’s were administered to attain hemoglobin levels in excess of the 12 g/dL level recommended in the ESA product labels.”

Dr Jenkins also said the FDA became aware of safety concerns about the use of ESA’s in cancer patients receiving chemotherapy between 2001 and 2003, when the agency received reports from two trials (BEST and ENHANCE) that demonstrated higher mortality and more rapid tumor growth when the ESA’s were given to maintain hemoglobin levels of greater than 12 g/dL and the findings were discussed at a May 2004 meeting of the ODAC.

He said the new safety data was added to the labeling for ESA products shortly after that meeting and that the advisory panel recommended additional data be gathered to further evaluate the new safety concerns about patients with cancer.

However, according to Dr Jenkins, it was not until late 2006 and early 2007 that the FDA was informed of several new trials in cancer patients that raised additional safety concerns.

In December 2006, the ESA makers informed the FDA of the interim results of the Danish Head and Neck Cancer Study Group trial (DAHANCA 10), a trial that compared radiation therapy alone to radiation therapy plus Aranesp in the treatment of advanced head and neck cancer.

The trial assessed whether treating anemia to achieve and maintain a hemoglobin concentration of 14.0-15.5 g/dL during radiotherapy would improve local-regional disease control.

The data monitoring committee for this trial found that 3-year local-regional control in patients treated with Aranesp was worse than for those not receiving Aranesp. Overall survival time also favored those not treated with Aranesp, he said, and the monitoring committee recommended the ESA treatment be stopped in the experimental arm on December 1, 2006.

Dr Jenkins said the FDA was notified in January 2007 of the results of a 989 patient trial of Aranesp in cancer patients with anemia who were not receiving chemotherapy when the target hemoglobin in the Aranesp treatment group was 12 g/dL.

The FDA’s analysis of the study data, he told the Committee, demonstrated that Aranesp did not significantly reduce the need for red blood cell transfusions and showed an increase in mortality in patients receiving Aranesp compared to those receiving placebo.

He said the FDA was also notified in February 2007 of the final results of a double-blind, placebo-controlled study that was designed to evaluate whether Epoetin alpha improved the quality of life for patients with non-small cell lung cancer who were not receiving chemotherapy with the dose titrated to maintain a hemoglobin level of 12 to 14 g/dL.

However, according to Dr Jenkins, this study was closed down in December 2003 after enrolling only 70 patients because its data monitoring committee found higher mortality rates in patients treated with Epoetin alfa.

Dr Jenkins informed the panel that the median time to death in patients treated with Epoetin alfa was 68 days and significantly shorter than the median time of 131 days in those treated with placebo. Also, he noted, treatment with Epoetin alfa did not significantly reduce the need for red blood cell transfusion or improve quality of life.

Dr Jenkins also explained that in 1996, the FDA approved the indication for use of ESA’s to reduce the need for blood transfusions in patients with hemoglobin values between 10 and 13 g/dL scheduled to undergo non-vascular, non-cardiac surgery.

Here, too, the approval was accompanied by a commitment to complete a post-marketing study to evaluate the risk for thrombotic events among patients who were not receiving preventive therapy with anti-thrombotic drugs.

In this case, according to Dr Jenkins, the FDA only received the results of this post-marketing study in 2007. Specifically, he said, the FDA was notified in February 2007 of the preliminary results of a trial with Procrit compared to the standard of care in patients undergoing spinal surgery.

“In this trial,” he said, “the frequency of deep venous thrombosis in patients treated with Procrit was 4.7 percent (16 patients), a rate more than twice that of patients who received usual blood conservation care (2.1 percent, seven patients).”

On June 26, 2007, Robert Vito, Regional Inspector General in Philadelphia at the US Department of Health and Human Services’ Office of Inspector General, testified at a hearing before the House Ways and Means Committee subcommittee and described cases where dialysis centers have been found to be overbilling Medicare for the anemia drugs.

He discussed a 2004 audit of payments to DaVita for ESA services provided at one Philadelphia dialysis center, which found that 44 of the 143 claims reviewed did not meet Medicare payment requirements.

In some cases, he said, they identified inconsistencies between the number of units prescribed in the physician order and the number billed to Medicare and also identified instances in which the drug was still administered to the patient after the doctor had ordered its discontinuation.

As another example, he told the committee that, in 2005, Gambro Healthcare, owner and operator of over 500 dialysis centers, agreed to pay over $350 million to resolve civil and criminal fraud allegations in the Medicare, Medicaid and TRICARE programs. To resolve its civil liability, he noted, Gambro paid $310.5 million for submitting false claims to Medicare and paying doctors improper remuneration related to their medical director services.

The new CMS reimbursement rules stipulate that cancer patients receiving chemotherapy should only use ESA’s if their hemoglobin levels fall below 10 and also limit the duration of therapy to a maximum of eight weeks after the completion of chemotherapy. They also limit the starting dose to match the FDA recommendations and limit the levels by which doses can be raised and Medicare will not cover treatment for anemic cancer patients who are not receiving chemotherapy or radiation.

The subpoena from New York Attorney General is just the tip of the iceberg when it comes to Amgen’s legal woes. The company’s failure to disclose the results of a Danish study in head and neck cancer has resulted in an inquiry by the SEC and several shareholder lawsuits.

According to the SEC filing, a class-action lawsuit was filed on May 11, 2007, in California, alleging that Amgen and its executives “made false statements that resulted in a fraudulent scheme and course of business operated as a fraud or deceit on purchasers of Amgen publicly traded securities.”

On May 14, 2007, the company was also served with a shareholder demand on the board of directors to establish a “special litigation committee” to investigate potential breaches of fiduciary duties by current or former officers and directors of the company, according to the filing.

The shareholders allege that these individuals violated core fiduciary duties, causing Amgen to suffer damages, and seek to recover damages resulting from their breach of fiduciary duties, monies and benefits improperly granted to them, insider trading proceeds and all costs associated with the inquiry by the SEC.

To increase profits, drugs used to treat anemia in patients covered by Medicare are being given at higher doses and for conditions not approved by the FDA, due to reimbursement policies adopted by the Centers for Medicare and Medicaid Services under the leadership of top officials appointed by the Big Pharma-friendly Bush Administration.

At a December 6, 2006 hearing of the House Ways and Means Committee, then chairman Bill Thomas (R-CA), told Leslie Norwalk, acting commissioner of the CMS, “we have a payment policy that perhaps is killing people; and we are using $2 billion, the highest price paid in a relatively narrow area for the use of the drug through the payment policy, that may in fact be doing that.”

Studies have shown that the massive off-label marketing of these drugs has definitely resulted in many deaths, but the question that remains is how many.

The drugs at issue include Aranesp, the brand name for darbepoetin, and Epogen and Procrit, the brand names for epoetin. Amgen manufactures all three drugs, but Ortho Biotech Products, a Johnson & Johnson subsidiary markets Procrit.

They are top money-makers for both companies. In 2006, ESA’s combined had sales of nearly $10 billion, and Aranesp and Epogen accounted for $6.63 billion, or 48% of Amgen’s total $14.3 billion revenue in 2006.

The drugs belong to a class known as Erythropoiesis Stimulating Agents (ESAs), which are man-made versions of a hormone normally produced in the kidneys to stimulate bone marrow cells to produce hemoglobin which is the main component of red blood cells.

The severity of anemia is determined by a patient’s hematocrit, the proportion of red blood cells in whole blood, which should remain at between 33% and 36%, according to the FDA. The labeling for ESAs specifies that patients should have a hemoglobin level no higher than 12 grams per deciliter of blood.

ESAs are approved only to treat anemia and reduce the need for blood transfusions in patients with chronic kidney failure undergoing dialysis, patients with cancer who are receiving chemotherapy, patients scheduled for major surgery, and HIV patients with anemia due to zidovudine therapy.

However, they are being administered off-label to kidney patients who are not receiving dialysis, cancer patients who are not undergoing chemotherapy and in doses that result in higher levels of hemoglobin than are approved by the FDA as safe and effective.

On March 9, 2007, the FDA announced that all ESAs must carry black box warnings on their labels about the increased risk for serious side effects, including death, and advised doctors that they should use the lowest dose necessary to avoid the need for blood transfusions caused by anemia.

Several recent reports have shown that dialysis centers are administering higher doses of ESAs which has resulted in an increased rate of stroke, heart attack and death in dialysis patients. The dosage received by the typical dialysis patient in the US has nearly tripled since the early 1990s, according to the November 16, 2006, New York Times.

A paper presented at the annual conference of the American Society of Nephrology[,] reported that 37% of patients at Davita clinics, the second largest provider of dialysis in the US, had hemoglobin levels higher than 14 grams at least one time in a 9-month period.

Dialysis patients in the US are dying at a higher rate due to this drugging-for-profit scheme. In Europe, where lower doses of ESAs are given, the Times reports that, about 15% of dialysis patients die each year compared to 22% in the US.

Dialysis centers are also boosting profits by administering the drugs intravenously instead of by injection. According to the Boston Globe on October 24, 2006, clinics would use 30% less ESAs, at a potential savings of $375 million each year, if ESAs were injected because the method require a lower dose and they stay in the system longer.

Critics blame the over-use on the financial incentives in Medicare reimbursement policies. Medicare covers medical care for patients with End Stage Renal Disease, and between 1998 and 2003, spending for ESRD patients increased nearly 50%. About $64,000 a year is spent for each dialysis patient, according to US Renal Data System.

Medicare guarantees dialysis centers a 6% profit for administering ESAs, and in April 2006, the CMS drew fire from Capitol Hill when it adopted a policy allowing payment for the administration of ESAs until hematocrits reached 39%.

The Ways and Means Committee chairman, Rep Thomas, sent a letter chastising Mark McClellan, the CMS Administer at the time, asking why CMS had not developed a policy to deal with the out-of-control dosing of patients at a higher levels. “I cannot understand why CMS would knowingly contradict FDA findings,” he wrote.

The CMS did not respond to the letter, so in November 2006, incoming chairman of the Committee, Rep Pete Stark (D-CA), and Rep Thomas sent a another letter to acting CMS Administrator Leslie Norwalk, describing the CMS policy as “a reimbursement incentive for providers to continue to increase doses” past the approved level.

Ms Norwalk did not respond to that letter either, but on December 6, 2006, Ms Norwalk and specific experts were called to testify at a Committee hearing due to “growing concern about unsafe and questionable treatment for Medicare’s coverage for kidney failure, also known as End Stage Renal Disease,” Rep Thomas said.

Through the current rules which endorse expanding reimbursement to allow hematocrit to be targeted to any level, Thomas said, CMS has implemented a policy harmful to its beneficiaries that will cost hundreds of millions of dollars in additional expenditures.

During the questioning of Ms Norwalk, it was revealed that the Monitoring Policy Group, created by the CMS, approved the higher hematocrit guidelines, and two-thirds of the members had financial ties to either Amgen, Johnson & Johnson or the dialysis clinics that profit by selling more of the drugs.

“Now what troubles me is that of the 24 members,” Rep Stark told Ms Norwalk, “18 of them disclosed financial associations with Amgen or Johnson & Johnson.”

It was also noted that the National Kidney Foundation guidelines had raised the hemoglobin limit to 13. However, a clue as to how that came about surfaced a few months later on March 21, 2007, when the New York Times reported that the president of the Foundation, Dr Allan Collins, was also the director of the Minneapolis-based Medical Research Foundation and in 2004, the year he was made president, Amgen underwrote more than $1.9 million worth of research and education programs led by Dr Collins, and paid him at least $25,800 in mostly consulting and speaking fees in 2005.

Dr Laura Pizzi, a professor at Jefferson Medical College, testified as lead author on a study in the November 2006, Dialysis and Transplantation journal, conducted to determine to what extent health care providers were adhering to clinical guidelines for patients receiving dialysis.

She said the study found significant overuse of the drugs, and although the researchers were not surprised to see that providers were not strictly adhering to the guidelines, they were surprised by the extent to which ESA use deviated from the recommendations.

When converting the increased use to dollar amounts based on Medicare reimbursement rates in 2005, Dr Pizzi said the population with a red blood cell count above industry guidelines had higher drug costs of $3,100 per patient each year.

“We estimate that CMS,” she told the panel, “could have reduced expenditures for these drugs by 36 percent if dialysis facilities adhered to the guidelines.”

If CMS spends $2 billion a year, she said, “it is reasonable to say that several hundred million dollars could have been saved if the providers followed the guidelines.”

Dr Noshi Ishak, a kidney specialist who owns a dialysis clinic in Laconia, NH addressed the huge profits of administering ESA’s intravenously instead of by injections.

He said he switched to administering the drugs by injection in 1998 and usage dropped by more than 20%, or equivalent “to $3,120 savings per patient per year for Medicare.”

The FDA’s Oncology Drugs Advisory Panel is scheduled to meet on May 10, 2007, to review the safety and effectiveness of ESAs, and lawmakers have ordered Amgen and J&J to cease all direct-to-consumer advertising and physician incentives until the FDA determines whether measures need to be taken to protect the public from these products.

Medicare has provided coverage for all patients with End Stage Renal Disease since 1972, and according to the House Ways and Means Committee, the government pays for 93% of services provided to dialysis patients, at a cost of about $2 billion a year.

In 2005, the drugs darbepoetin and epoetin, commonly used by patients who must undergo dialysis, accounted for almost 20% of the $13 billion spent on the Medicare Part B drug plan, and total sales for these drugs worldwide topped $9 billion.

Amgen manufactures and markets darbepoetin as Aranesp, and epoetin is sold under the names Procrit and Epogen. But Procrit is distributed by Ortho Biotech Products, a Johnson & Johnson subsidiary. There are no generic versions of these medications.

The drugs are among the top sellers for both companies. Amgen’s Epogen and Aranesp combined sales were $6.6 billion in 2006, nearly half of the company’s total revenues. Johnson and Johnson’s revenues were $3.2 billion in 2006, making it the company’s second-biggest-selling drug, according to Forbes.com on March 21, 2007.

The drugs are man-made versions of erythropoietin, a hormone normally produced in the kidneys, and belong to a class of drugs known as Erythropoiesis Stimulating Agents. ESA’s are used to treat anemia in raising hemoglobin levels by increasing the number of red blood cells in the body. Anemia’s severity is monitored by a patient’s hematocrit, the proportion of red blood cells in whole blood, which should stay between 33% and 36%.

According to the FDA, ESAs are approved to treat anemia in patients with chronic kidney failure, patients with cancer whose anemia is caused by chemotherapy, patients scheduled for major surgery to reduce potential blood transfusions, and for the treatment of anemia due to zidovudine therapy in HIV patients.

But Aranesp, Epogen, and Procrit are being administered “off label” for uses and in doses not approved by the FDA. For instance, an Amgen vice president recently estimated that about 10% to 12% of Aranesp sales are for the unapproved use of treating “anemia of cancer” in patients who are not undergoing chemotherapy.

A recent company study conducted to support FDA approval for using the drug to treat “anemia of cancer” in patients with cancer in remission who were not undergoing chemotherapy, revealed that Aranesp actually increased the risk of death in these patients.

The February 2, 2007, “Cancer Letter ,” a newsletter for cancer professionals, warns, “If the findings of the recently reported study hold up, more than one in 10 Americans getting Aranesp without chemotherapy has no chance of benefiting from the agent and could be harmed or killed by it, experts say.”

The report estimated that up to 12% of the use of ESAs in the US was for this condition.

After reviewing the results of this study and several others, on March 9, 2007, the FDA announced that black box warnings would be added to the labels for all ESAs and recommended using the lowest possible dose to raise the hemoglobin concentration to the lowest level.

The FDA-approved labeling for the drugs says patients should have a hemoglobin level of 10-12 grams per deciliter of blood, and patients are considered to need treatment if their levels fall below 10 grams.

During a press briefing, Dr Richard Pazdur, director of the FDA’s Office of Oncology Drug Products at the Center for Drug Evaluation and Research, said the black box warning was being added based on the results of several recently reported clinical trials.

Dr Karen Weiss, deputy director of the Office of Oncology Drug Products, said the FDA became concerned after receiving the results from several trials evaluating the aggressive use of ESAs to raise hemoglobin levels higher than listed on their approved labels.

In the March 10, 2007 Wall Street Journal, Dr Weiss was quoted as saying, the “bulk of the data that has raised concerns” came when patients were given higher doses, whether they were experiencing anemia from kidney disease or cancer treatment.

The evidence shows that “this type of strategy is not beneficial and, in fact, has some evidence of harm,” she said.

On March 9, 2007, the FDA also issued a public health advisory based on the results of a number of studies and warned doctors treating patients with kidney disease or cancer not to push hemoglobin levels over 12 grams per deciliter of blood.

The FDA noted a higher chance of death and an increased rate of tumor growth in cancer patients with advanced head and neck cancer receiving radiation therapy and in patients with metastatic breast cancer receiving chemotherapy, when ESAs were given to maintain levels of more than 12.There was also a higher rate of death reported, but no fewer blood transfusions, when ESAs were given to patients with cancer and anemia who were not receiving chemotherapy.

A higher chance of death and an increased number of blood clots, strokes, heart failure and heart attacks were found in patients with chronic kidney failure when ESAs were given to raise hemoglobin levels of more than 12.The Advisory warned that a higher risk of blood clots was also reported in patients who were scheduled for major surgery and received ESAs.

The FDA pointed out that ESAs are not approved for treatment of the symptoms of anemia, such as fatigue in patients with cancer, surgical patients and patients with HIV.

The drug makers have been using direct-to-consumer advertising to increase sales with cancer patients by claiming the drugs could restore energy and reduce fatigue in patients undergoing chemotherapy. But the FDA says there has never been any evidence to support claims that ESAs could increase energy or ease fatigue in patients undergoing cancer treatment.

In recent months, Congress has been investigating Medicare reimbursement policies that guarantee dialysis clinics a 6% profit for administering ESAs, since it became apparent that patients are being given higher doses than needed. Critics say any deal that allows for cost plus payments comes with a built-in incentive to provide unnecessary services.

On October 24, 2006, the Boston Globe reported that dialysis clinics are also increasing profits by administering ESAs intravenously instead of by injection, and about 95% of the patients receive the drugs intravenously.

Clinics could use 30% less, the Globe says, because when ESAs are injected they stay in the system longer and require a lower dose. A 2004 analysis found patients injected with the drugs were given 21% less, for a potential total savings of about $375 million.

The two clinic chains that dominate the dialysis industry are DaVita, with over 1,200 clinics, and Fresenius Medical Care, with about 1,500. According to the Globe, the clinics claim the intravenous method is more convenient because patients are already hooked up to IVs for dialysis.

Critics think differently. “The industry is incentivized to use intravenous because they make a profit margin on every unit they administer,” said Dr Peter Crooks, who oversees dialysis for 3,000 patients for Kaiser Permanente where most patients receive injections.

In an April 11, 2007 report, Bernstein Research estimates that dose volume in renal patients could fall as much as 25% if doctors abide by the new black box warning and insurers refuse to pay for the drugs in patients with hemoglobin levels over 12.

On November 17, 2006, the British journal Lancet reported that about half of all dialysis patients have hemoglobin levels above what the FDA considers safe, and about 20% of patients experience dangerously high levels, creating a risk for heart attack and stroke.

The anti-epileptic drug, Depakote (valproate), marketed by Abbott Laboratories, is one of the most heavily prescribed medications for off-label use. Experts say the evidence of harm caused by Depakote is just beginning to emerge.

According to Harrisburg, Pennsylvania psychiatrist, Dr Stefan Kruszewski, a recognized expert on psychotropic drugs, “we can anticipate a continuing series of tragic outcomes from the massive overuse of Depakote, secondary not only to birth defects and death, but also due to anemias, hepatic disease, obesity, diabetes type II, pancreatitis and other serious systemic and neurological dysfunctions.”

Bayer is under fire for hiding the adverse effects of the anti-clotting drug, Trasylol, used in heart surgery, and will no doubt be hit with plenty of lawsuits in the not to distant future, considering that Dr Dennis Mangano, the lead author of new study in the February 7, 2007, Journal of the American Medical Association, says that the Trasylol may be responsible for 10,000 deaths over five years.

On December 15, 2006, the FDA announced new labeling for Trasylol, and said a study suggests that, in addition to serious kidney damage, Trasylol may increase the chance for death, congestive heart failure (a weakening of the heart), and strokes.

Because Trasylol is administered during surgery, many victims may not even realize they have been injured by the drug. But plenty have, according to Dr Mangano, who says that in 2006, Trasylol, was administered to 246,000 patients.

Another drug on the legal chopping block is the Parkinson’s drug, Permax. As far back as December 2002, doctors at the Mayo Clinic reported heart valve disease in 3 patients who had been taking Permax, similar to damage caused by the Fen-Phen combination.

In 2004, HealthDay News reported that a study had confirmed previous findings that the drug could damage heart valves and surgery would be needed to correct it. Two new studies in the January 4, 2007, New England Journal of Medicine, report that the number of Permax patients who have developed valve damage is higher than expected.

One study, which included 155 patients taking various Parkinson’s drugs, and 90 healthy patients in a comparison group, and found moderate to severe valve problems in more than 23% of the patients on Permax, compared to less than 6% in the comparison group.

The second study found Permax users were 5 to 7 times more likely to have leaky heart valves than patients taking other types of Parkinson’s drugs, and patients taking the highest doses of Permax had a 37 times greater risk.

“This is not a rare side effect,” says Dr Bryan Roth, a professor at the University of North Carolina, who wrote an editorial accompanying the reports in the NEJM.

“That’s an extraordinarily high incidence,” he warns. “That makes this a serious problem.”

Heart valve damage is a life-threatening condition and costly to treat. Replacement requires open heart surgery, where the breastbone is divided, the heart is stopped, and blood is sent through a heart-lung machine, according to the Texas Heart Institute. No drug can reverse valve damage, making replacement surgery the only option. Medical experts are advising all Permax patients to undergo testing for valve damage.

The drug was introduced to the US market by Eli Lilly, but Valeant Pharmaceuticals now sells Permax. On March 29, 2007, Permax was pulled off the market after the FDA reviewed new information that associates it with heart problems.

During the last 2 decades, the antidepressants, known as selective serotonin reuptake inhibitors, or SSRIs, have been prescribed for more unapproved uses than any other class of drugs in history. A June 2005, study in the Journal of Clinical Psychiatry, found that 75% of SSRI prescriptions written were for unapproved uses.

SSRIs have now been linked to suicidality, extreme violence and homicide, several life-threatening birth defects, abnormal uterine or gastrointestinal bleeding, a decrease in bone mineral density, fertility problems, sexual dysfunction, and a severe withdrawal syndrome.

On April 10, 2004, the British Medical Journal, criticized the authors of studies on SSRI’s for exaggerating the benefits and downplaying the harm, including suicidality, and discussed a study of 93 children on Paxil that produced 11 serious adverse events, including 7 hospitalizations, compared to only 2 in children in the placebo group.

The Paxil suicide risk is not limited to children. An August 22, 2005, study by Norwegian researchers of over 1,500 adults, found 7 Paxil patients attempted suicide compared to only 1 attempt in the group on a placebo, and recommended that warnings not to prescribe Paxil to children should also apply to adults.

According to Forest Lab’s Annual Report filed on June 14, 2006, the company is a named defendant in approximately 25 lawsuits, with the majority involving the company’s top selling SSRI drugs, Celexa or Lexapro, for inducing suicidality.

A wrongful death lawsuit was filed in September 2005, by the Pogust & Braslow law firm in Conshohocken, Pennsylvania, on behalf of the family of 32-year-old man who unexpectedly committed suicide soon after being prescribed Lexapro.

A steady stream of lawsuits have been filed against GlaxoSmithKline over Paxil, stemming from the company’s concealment of the drug’s link to suicide, birth defects, violence and withdrawal syndrome.

On March 23, 2006, the California-based Baum Hedlund law firm filed a national class-action lawsuit against Glaxo on behalf of the mother of an 11-year old Kansas boy who committed suicide, and a teenager in Texas who attempted suicide while taking Paxil.

She says, Baum Hedlund has documents obtained in litigation that show there was an awareness of the suicide risk as far back as the late 1970’s, a decade before the first SSRI was approved for sale in the US.

A new round of Paxil lawsuits began on October 16, 2006, when Baum Hedlund filed a case alleging that Paxil use during pregnancy resulted in an infant being born with a life-threatening lung disorder, PPHN. Between 10% and 20% of infants born with PPHN end up dying, even when they receive treatment.

On July 28, 2006, Baum Hedlund also filed a lawsuit on behalf of the parents of an infant who was born with congenital heart birth defects as a result of his mother taking Paxil during pregnancy. Since birth, the child has undergone 3 open-heart surgeries and will likely have to undergo more and possibly a heart transplant at some point in the future.

Based on the company’s legendary history of concealing adverse effects, the lead attorney on the case, Karen Barth Menzies, says believes Glaxo has known about these risks and should have warned prescribing doctors and consumers about these birth defects long ago.

The Houston law firm of Robert Kwok & Associates is handling a Celexa birth heart defects case in Kentucky. The mother was prescribed Celexa during pregnancy, and her baby was born with Shone’s Complex, a form of congenital heart disease that consists of defects that lead to the obstruction of blood flow from the heart to the body.

Legal analysts are predicting that SSRI makers will offer early settlements in cases involving birth defects to avoid having these families appear before a jury.

Pfizer is still being sued left and right over adverse effects related to the epilepsy drug Neurontin. In 2004, the company pleaded guilty to charges involving a massive off-label marketing scheme and agreed to pay the second-largest settlement ever in a health care fraud prosecution of $403 million. By 2002, a full 94% of Neurontin sales were for off-label use, according to the August 16, 2004 USA Today.

Many private lawsuits involve Neurontin-induced suicidality. The Pogust & Braslow law firm is handling a case for Natalie Biedenbender, whose husband committed suicide at age 39, after being prescribed the drug off-label for back pain.

“Although Neurontin is prescribed for scores of off-label indications,” Attorney Derek Braslow reports, “since 1999, the off-label use continues to be most common in the areas where the company focused its illegal marketing efforts, such as bipolar disorder, peripheral neuropathy, and migraine.”

Two lawsuits were recently filed against Novartis and Astellas Pharma, the makers of the topical skin creams, Elidel and Protopic, used to treat eczema. Alan and Dayna Thomson filed a lawsuit in December 2006 after their daughter Haley died after using Elidel, and Ashley McDonald filed a lawsuit in January 2007 after being diagnosed with lymphoma following her use of Elidel.

In another case, Traci Reilly, of Naperville, Illinois, developed breast cancer after applying Protopic and Elidel for a condition that caused patches of discolored skin on her breast.

Protopic and Elidel belong to a class of drugs known as calcineurin inhibitors, so called because they reduce immune activity by inhibiting the activity of the enzyme calcineurin in organ transplant patients. Use of these drugs has long been known to increase the risk of cancer, and the drugs were labeled accordingly for use in transplant patients.

Protopic and Elidel have only been on the market for about 5 years and together have already been prescribed to more than 7 million people. In 2006, the FDA added a black box warning to the skin creams about the cancer risk.

On February 21, 2007, Tom Moore, the author of several books on the pharmaceutical industry, told CBS News that he had studied about 1,200 cases of suspected injuries pertaining to Protopic and Elidel reported to the FDA through 2005 and found more than 100 potential cancer cases in children and adults, with most involving lymphoma or skin cancer.

For many years, Wyeth led women to believe that taking Prempro, with the combined hormones of estrogen and progestin, would not only relieve hot flashes, vaginal dryness, night sweats, and moodiness, but it would also prevent heart disease, osteoporosis, and mental deterioration.

Very little of that advice now appears to be true. The latest FDA approved labeling for Prempro states in part:

“Do not use estrogens and progestins to prevent heart disease, heart attacks, strokes, or dementia. Using estrogens and progestins may increase your chances of getting heart attacks, strokes, breast cancer, or blood clots. Using estrogens, with or without progestins, may increase your risk of dementia, based on a study of women age 65 years or older.”

Prempro was approved as a hormone replacement therapy to treat menopause and prevent osteoporosis only. The wide-spread over-prescribing of the drug for other conditions was a result of Wyeth promoting the drug for off-label uses.

Off-label refers to the practice of physicians prescribing an FDA approved medication for uses other than the indications listed on the drug’s label. While this practice may be justified in exceptional cases, critics say, HRT illustrates the damage that can occur when off-label prescribing becomes routine.

The widespread myths about the cures of hormone therapy began in 1965, when Dr Robert Wilson, published the book, “Feminine Forever,” without revealing that he was a consultant to Wyeth, the maker of the hormone drug Premarin.

By the mid-1970’s, a clinical trial showed that Premarin increased the risk of endometrial cancer, and a scientific panel had rejected virtually all of its benefits except for hot flashes and vaginal dryness. When Premarin sales fell, Wyeth added progestin to the pill, and created HRT.

The vast popularity of HRT, was in large part due to Wyeth’s successful efforts to promote the off-label use of Prempro through the media by providing information which overstated its benefits and downplayed the cancer risks.

An article in the October 1997, Ladies Home Journal, stated: “A woman’s chance of dying from heart disease is more than five times greater than dying from breast cancer, and HRT lowers that risk.”

A story in the September 1998, Better Homes and Gardens, told women, “talk to your doctor about taking estrogen or hormone replacement therapy.”

“Research has shown,” the article stated, “that estrogen and HRT may reduce the risk of heart attack after menopause by as much as 50 percent.”

As part of a Wyeth-sponsored American Heart Association campaign in 1998, the media received a pamphlet entitled, “Take Charge! A Woman’s Guide to Fighting Heart Disease.”

It listed loss of estrogen first under risk factors for heart disease, and stated: “Estrogen replacement helps protect against coronary heart disease risk.”

What critics say is most disturbing, is that the media continued to publish articles with similar statements even after the 1998 Heart and Estrogen/Progestin Replacement Study, which found that women who used HRT actually had a higher rate of heart disease during the first year of therapy.

It got to the point where the National Institute of Health decided that the use of hormones for disease prevention had to be studied precisely because doctors were prescribing the drugs off-label to so many women, even though long-term safety and efficacy had not been established.

In 2002, millions of women quit taking hormone pills, after an 8-year study was halted by the NIH after five years. The study by the Women’s Health Initiative included 16,000 women and found that women who received HRT had significant increases in breast cancer, heart attacks, strokes, and blood clots.

The principal investigators of the study reported that further trials to test other estrogen and progestin formulations would be unethical and a waste of tax dollars because there was no reason to believe any other formulations would render a different result.

Similarly, they said, there would be no reason to test HRT for the prevention of heart disease in women 50 to 59-years-old, because one third of the WHI’s volunteers were in their 50’s, and they had the highest increased risk of stroke.

Within 3 months after the study was released, Wyeth’s stock had fallen more than 55%, eroding its $48 billion in market value, according to TradingMarkets.com on February 28, 2007.

Critics of the study claim that it was the type of hormones, the dose, and the method of use which increased the health risks. The study tested HRT with estrogen made from the urine of pregnant horses, and some experts believe that estrogen from plant sources is better suited for treating menopause because it is closer to what the human body produces.

The most common risks associated with HRT, are blood clots, which can cut off the blood supply to vital organs and, in the most serious cases, a pulmonary embolism can occur if a clot travels to the lungs from another area of the body.

A recent study by French researchers in the journal Circulation, compared 271 women who suffered blood clots to 610 women without clots and found that women taking hormone pills orally were over 4 times more likely to develop clots than women who did not take hormones or who received them from patches, gels or creams.

Hormones delivered through the skin cause fewer blood clots, doctors say, because they enter the bloodstream directly, similar to natural hormones. When taken in pill form, the drugs must be metabolized by the liver triggering some of the unwanted side effects before entering the blood stream.

Since the release of the 2002 study, Wyeth’s massive off-label promotion of HRT has come back to haunt the drug giant. According to SEC filings, as of December 31, 2006, there were approximately 5,200 lawsuits pending against the company filed on behalf of approximately 8,400 women for injuries related to its HRT, with about 60% of the cases filed in federal courts and 40% in state courts.

The latest lawsuit was filed by Nancey Land, a retired South Carolina teacher, who blames her breast cancer on Prempro, according to The State on March 2, 2007.

Ms Land’s attorney, Ken Suggs, won a case against Wyeth in February 2007, when a Philadelphia jury returned a $3 million verdict for a 67-year-old Dayton, Ohio, woman who said Prempro caused her breast cancer which resulted in a double mastectomy, chemotherapy, and radiation.

The woman initially won $1.5 million in October 2006, but a mistrial was later declared after a juror was found to be ineligible, Mr Suggs told The State.

During the retrial, the jury was told that Wyeth knew for decades that HRT could cause breast cancer but failed to warn patients.

In January 2007, Mr Suggs’ law firm also handled a trial where the jury awarded $1.5 million to an Arkansas woman.

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